September 11, 2012
By Jason Leander
Medical Malpractice Insurance: What Every Military Physician Should Know about
Coming home is a wonderful thing. But, transitioning from active military duty back into civilian life is often layered with many complex, smaller transitions. For military physicians, transitioning into (or beginning) a civilian medical position or practice can be difficult. Specifically, there are a several issues that military medical physicians should be aware of when transitioning into a civilian practice setting, regarding medical malpractice insurance. Taking the time to familiarize one’s self with these details can ensure that the transition is as smooth as possible.
The Civilian Medical Practice Landscape
Military physicians should be happy to hear that there are many career opportunities for military physicians in the civilian medical world. But, there are significant differences between medical malpractice insurance coverage in the military versus the civilian world.
Because of the excellent coverage military physicians have in the military/VA, due to the tort reform under which they are covered, it is very hard to bring a medical malpractice lawsuit against a military physician. Therefore, the number of malpractice claims against military doctors and the VA is very low. Because of this, military physicians are often surprised to learn that they are significantly more likely to face a malpractice lawsuit in civilian practice. Civilian medicine involves much more risk and exposure and civilian practice can be very litigious. Depending on their specialty, experts say that most physicians should expect at least one lawsuit (or more) over the course of their career.
Are There Military Discounts? Unfortunately, most malpractice insurance companies do not give a military discount. But, some military physicians may be able to qualify for a “new-to-practice” discount. All physicians should ask their malpractice insurance agent if they might qualify for this discount and if they might qualify for any other discounts.
What about Military Reserve Duty? When a physician serves in the military reserve, he or she is still covered under the military for their reserve duties, but not for any additional civilian medical work. Military physicians should never assume that because they are covered for their military reserve work that they are covered for all medical work. This is not the case. They are not covered for any additional civilian work. What If I Moonlight? Even after finding full-time civilian jobs, it is quite common for former military physicians to moonlight. This brings us to another large assumption that physicians should never make.
Physicians should never assume that their full-time, civilian position policy covers them for their moonlighting work as well. It does not. All moonlighting physicians need a separate policy to cover them for their moonlighting activities. Moonlighting is generally considered a position of 20 hours or less per week and the policies are easy to purchase and relatively inexpensive. Like full-time position policies, prices for moonlighting policies depend on specialty, duties, number of hours, state, etc.
Medical Malpractice Insurance Vocabulary
Just like medicine has its own vocabulary, medical malpractice insurance has its own vocabulary. And because they did not have to worry about their coverage in the past, former military physicians are often unfamiliar with civilian medical malpractice insurance terminology. We suggest that every physician have a working knowledge of the most basic of liability insurance terms. However, every malpractice insurance agent should be able (and happy) to explain any and all terms and concepts to their client. Every client should completely understand his or her medical malpractice insurance policy, including what it covers and what it does not cover. As a starting point, here are the most common medical malpractice insurance terms that every civilian physician should know:
Claims-Made Coverage:
This type of policy covers a physician for incidents that take place and are reported to the company after the initial date of claims-made coverage (retroactive date), as long as the policy is still in force.
Because claims-made insurance only provides coverage for incidents reported while the policy is in force, upon termination of a claims-made policy, a physician needs to purchase extended reporting (tail) coverage. This ensures that insurance coverage will be provided for claims that arise after the termination of coverage for incidents that occurred while the claims-made policy was in force. An alternative to purchasing tail coverage is to purchase prior acts (retroactive) coverage when converting insurance coverage from one insurance company to another.
(Some good news: former military physicians do not need to purchase a tail for their past work as a military physician. With the government, like an occurrence policy (see below), a tail is not required. Although, it should be noted, the purchase of a tail may be required in the future.)
Occurrence Coverage:
An occurrence insurance policy covers a physician for any incidents that occur while the policy is in force, regardless of when a claim is made or reported.
Because of the nature of occurrence coverage and the long-tail nature of medical malpractice, premiums for occurrence coverage can be substantially higher than for claims made. Since economic damages can increase dramatically between the time an incident takes place and the time a claim is made, it becomes difficult for companies to adequately assess the impact of inflation and other factors that affect claim settlements and judgments.
This can cause companies to cautiously set premiums higher than need be or to jeopardize their financial stability if premiums are not adequate. Most insurance companies no longer offer occurrence type medical malpractice insurance, preferring the perceived more stable claims made form.
Admitted Carrier:
An admitted medical malpractice insurance carrier is one that has been admitted by that state’s department of insurance and is subject to the state’s rules, oversight, and regulation. The vast majority of physicians choose to go with an admitted carrier and consider these companies to be the “safest” choice – because they are backed by the state’s department of insurance.
Surplus lines (non-admitted) carriers:
Surplus lines medical malpractice insurance companies have not been admitted by the state’s department of insurance. While they are not regulated by the state, they are often a good choice for physicians who have had claims, licensing, or other problems. It should not be assumed that surplus lines companies are any less reputable or well-established companies than their admitted cousins. Like all insurance companies, some are better than others, and the company’s history should always be researched, and ideally, a rating from AM Best should be reviewed.
About the author:
Jason Leander is Vice President with MyMedicalMalpracticeInsurance.com. In addition to medical malpractice insurance, Jason has also worked in the financial industry, with an emphasis on long-term financial planning. His father was an Air Force Veteran and served in Korea.